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How to conduct fair and effective performance reviews

It may be the most common target for Dilbert cartoons, but the performance review is an ethical obligation for a manager.

Every employee in every job setting wants to know two things: What do you expect of me? and How am I doing at meeting your expectations? A manager has an obligation to answer those questions, says Dick Grote, a management consultant specializing in appraisals and author of the book, “How To Be Good at Performance Appraisals(Harvard Business Review Press).

A beginning, an end, and a middle

The appraisal is a year-long process.

At the start of the year, implement the first step: Set the expectations.

At the end of the year, implement the second: Tell staff how well they have met those expectations.

And throughout the year, keep notes on what each person does right and does wrong.

Set your computer calendar to give a prompt every two weeks to make the entries. With ongoing notes, there’s no relying on memory and no chance the manager will be rating only the most recent performance.

Short numbers; long judgment

Now comes the review.

Focus the ratings on the whether the staffer has met the expectations and how that person went about achieving those results.

Use a grading scale of five levels – completely unacceptable, not as good as it should be, meets the expectations, exceeds the expectations, and outstanding.

More than five and it gets iffy which number applies; less than that and the review is too broad. With five, it’s easy to give an accurate grade. The levels are clear and distinguishable.

Grote points out, however, that the numbers aren’t the final answer. A lot of the rating depends on the notes taken throughout the year and also on the manager’s judgment.

Just adding up the ratings and getting an average doesn’t show someone’s value as an employee. “Some things are more important than others” and warrant heavier consideration, he explains. He gives the example of a staffer who scores a 5 in performance and a 1 in integrity. That person is certainly not a 3.

An appraisal isn’t “some testable, provable document,” Grote says. By definition, it’s “a formal record of the manager’s opinion of the employee’s work,” he says. There has to be personal judgment to it.

But is that objective?

It is, he says, if the manager “is honest and bases the ratings on actual examples, that’s an objective appraisal.”

Leave out the self appraisals

What about having staff do self appraisals?

In theory, a self appraisal makes a review fair, because it gives staff a chance to toot their own horns.

But the failing, he says, is that “people are unable to evaluate how good or how bad a job they are doing.” The poorest performers think they’re doing a great job because they don’t have the ability to know if the job is getting done well or not. Conversely, the best performers see fault in their work.

Writers are a good example of that, he notes. The best ones never talk about how good they are while the worst think they’re William Faulkner and Ernest Hemingway all wrapped into one.

Instead of having staff evaluate themselves, tell them to draw up a “good-stuff list” of all the accomplishments they want the manager to consider. Then every accomplishment gets recognized.

No sandwiches either

Another thing to do away with is the sandwich appraisal, or two compliments on either side of criticism.

Managers use it as a way of cushioning negative remarks, “but it’s a terrible idea,” Grote says.

The good performers see it as patronizing. “It’s like patting them on the head” when what they want is an honest appraisal, he explains.

It’s the poor performers who like it, because it allows them to walk out of the meeting with two compliments in hand, “and the stuff in the middle is just noise,” he says.

Instead, Grote advocates giving each staffer “a single message.”

For the solid performers, focus on recognition and celebration.

For the others, be just as honest. “Focus the entire conversation on the performance not being acceptable,” he says.

Point out their strengths, he says, but make it clear that those strengths “are overwhelmed by the problems that need immediate correction.”

And no across-the-board raises

A final caution: Don’t give across-the-board raises.

Lots of employers do, Grote says. They have enough money in the budget for, say, a 3 percent salary increase and simply divide it up.

Do that and the best performers get no more than the worst, and the worst get rewarded for sorry service. That’s not fair, he says. Doing a good job should make a difference.

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